Bangkok--29 Apr--UNISBKK
High-level panel on economic crisis part of ESCAP annual meeting
The current global economic crisis provides a good opportunity to address some long term issues, a high-level panel on the economic crisis agreed in discussions today in Bangkok .
The panel was part of the Economic and Social Commission for Asia and the Pacific (ESCAP) annual meeting. It was moderated by Noeleen Heyzer, United Nations Under-Secretary-General and Executive Secretary of ESCAP. The speakers included her counterparts for Africa, Abdoulie Janneh, and for Europe , Jan Kubis. Also speaking was Kim Jong-hoon, Minister of Trade, Republic of Korea ; Ajay Chhibber, Director for Asia and the Pacific, UN Development Programme; and Martin Khor, Executive Director, South Centre — an intergovernmental organization of developing countries based in Geneva .
“The Asia-Pacific region has shown remarkable resilience to this crisis,” said Dr Heyzer in her opening remarks. “This is due, in large part, to the wide ranging regulatory reforms taken by countries in our region since the 1997 economic crisis.” However, that resilience has been eroded under the strain, noted Dr Heyzer, and there are some critical issues the region needs to address.
“One is to guard against trade protectionism. An early conclusion of the Doha round and more intraregional integration would provide new impetus to economic recovery,” Dr. Heyzer said. She also called for more stable currency exchange rates in the region to prevent competitive devaluation in face of declining exports. It is important to intensify regional coordination and policy coherence, Dr. Heyzer pointed out, so that “economic recovery evolves in line with a more sustainable and inclusive process of economic growth.”
No region in the world is immune to the crisis, Mr. Kubis, Executive Secretary of the Economic Commission for Europe , pointed out. “For the European region, extreme poverty had almost been eliminated by the end of 2007,” he said.“But with higher food prices, falling employment opportunities, reduced remittances and strained safety nets, it is estimated that another 10 million people in the region have been pushed back into poverty.”
Mr Janneh of the Economic Commission for Africa noted that the widely held view that Africa , because of its lack of integration into global finance, would shield itself from the crisis had turned out to be optimistic. “We are now experiencing a slowdown in growth, declining exports, reduced tourism, investment flows, remittances and weakening currencies”
A major source of financial instability is the world’s dependency on the currency of a single country — the United States — as international reserve currency, according to Martin Khor of the South Centre. “This causes instability as availability of reserves for the world economy depends on the United States having growing current account deficits.” He called for an alternative reserve system based on the Special Drawing Rights of the IMF.
Mr Kim in his remarks cautioned against sneaking in “grey” protectionist measures with economic stimulus packages. Such policies are short-sighted as they fail to consider the possible reactions of trading partners and may escalate into a vicious cycle of counter protectionist measures. “What we need is a New Green Deal ,” said Mr. Kim. Investing in new green technologies will create high pay jobs while new green public works projects will increase demand for labour. Both will improve the environment.
Another long-term investment , Asia-Pacific governments should make using their stimulus packages is creating social protection measures, according to Mr. Chhibber of UNDP.
“Asian savings rates are extraordinarily high,” Mr Chhibber observed, “because the precautionary motive is so strong.” With little access to public health care and unemployment benefits, people resort to savings to protect themselves. “That is all money that does not go back into the economy,” he noted.
“The present crisis has provided us all with an important window of opportunity for addressing longer term issues,” Dr Heyzer said, summarizing the panel’s discussions. “The challenge ahead is to lay the economic and social foundations for a more inclusive development model that is based upon environmentally sound principals.”
ESCAP’s 65 th annual commission session, which brings together its 62 member governments, will end on Wednesday, 29 April.
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